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Cloud Market Share: AWS Still Ahead, But Watch Google Grow

With the release of Alphabet’s earnings earlier this week, all three major public cloud providers have posted their latest numbers, making it easy to see how the companies are divvying up cloud market share as the halfway mark of the year approaches.

Amazon Web Services (AWS) has maintained its cloud market share dominance in the cloud infrastructure services market, holding steady at 33% in Q1 2019, the same as it was one year earlier in Q1 2018, according to the latest numbers from Synergy Research

The overall growth of the cloud infrastructure market in Q1 2019 was 42% year-over-year, which has predictably fallen from a full-year 2018 growth rate of 48%, Synergy said. Interestingly, Microsoft, Google, Alibaba and Tencent all have higher growth rates than AWS, but collectively they are barely making a dent in the cloud market share leadership of AWS.

Despite AWS having the highest cloud market share, research firm Canalys shows that Google has a higher growth rate (83%) than AWS (41%) and Azure (75%) in Q1 2019.

In Q1 2019, Microsoft market share is 16%, double that of Google, which stood at 8% for the quarter. This is a number to watch as Google spends to build out its enterprise sales team to capture more cloud contracts, an area where new CEO Thomas Kurian brings particular expertise from his time at Oracle.

In an interview with Business Insider, Kurian estimated that Google Cloud’s sales team is one-tenth to one-fifteenth the size of those at AWS and Microsoft Azure. He intends for Google Cloud’s sales team to be half the size of its peers, though he didn’t share a timeline for that goal. In addition to growing its sales headcount, Google Cloud will train salespeople to speak the language of industry, including healthcare and media.

Canalys believes that in addition to direct sales, cloud vendor’s channel relationships will play an important role in their future success.

“The winning cloud providers will be those that invest in their programs, channel engagement and training, as well as use their alliance partners’ channel partner ecosystems,” Canalys research analyst Daniel Liu said in a statement.

But sales structure is much less interesting to an IT-centric audience than what is happening on the technology side. Canalys sees new hybrid cloud offerings being a key driver of enterprise adoption, making a difference on the bottom line.

“The cloud infrastructure market is moving into a new phase of hybrid IT adoption, with businesses demanding cloud services that can be more easily integrated with their on-premises environments,” Canalys chief analyst Alastair Edwards said. “As enterprises become more selective about which workloads move to the cloud, and which remain in their own data centers, cloud service providers must develop new strategies that ensure their continued relevance. Most cloud service providers are now looking at ways to enter customers’ existing data centers, either through their own products or via partnerships.”

Microsoft made a further move in this direction with a VMware partnership announced this week at Dell Technologies World which aims to give VMware users a consistent experience across their on-premises environments and Microsoft Azure. (AWS formed a similar partnership with VMware in 2016.)

At its recent Google Cloud Next conference, Google announced Anthos, a platform that lets users run an app anywhere without needing to modify the code, on either existing on-premises hardware or in the public cloud.